Goebbels taught the BIG LIE. Tell a big lie over and over and eventually people will swallow it. Its too big not to be true…

We seem to have partly swallowed it here… that the current austerity measures are all down to Labour's fecklessness and not about the banks.
The trouble is again Labour did engage in wholesale squandering… they did cosy up to the banks, Gordon Brown was a Greenspan fan etc.

Its a war of narratives.. but one in which the status quo have a clear imperative to drive on in the media. So hooray for your post. Amid all the smoke and mirrors one has to believe and history teaches it -The truth will out.
Or will it?

The state entered these deals, and the state has to pay them back.

The people have no obligation to pay, and they're free to withold taxes. They didn't sign as guarantors.

Simple as.

State workers can strike … until they can't pay their personal debts. That's bankruptcy for ya!

I think I linked that Hudson piece in a comment to an earlier post, but well worth linking again!

I think it's becoming very clear that the financial sector operates well beyond any sort of democratic control, tho' we get a PR veneer of 'finance minister' pretence it's otherwise. It's also clear that they cannot be trusted with our economies.

From Ponzi schemes, asset bubbles, drug & arms trade money laundering to massive off-shore tax havens, they have positioned themselves 'too big to fail, too big to jail'. Effectively above the law & above the pitiful 'captured' mess that is presented to us as 'democracy'.

The aquiescent 'majority' need to get themselves educated – the main stream media won't help them. But I sense a steady and growing interest, and indignation & with the exception of Greece the damage from the financial 'coup' has barely begun yet.

That would be a great start, but it doesn't address the underlying financial structure that led to 200 hundred or more years of so-called 'debt' crises, the latest being the 'PIIGS', but with devastating precedents in the Caribbean, South America, Asia and Africa.

Meanwhile the world continues to fret and sweat, not to mention starve …

I apologize in advance for what is a somewhat off-topic comment, but I found Michael Hudson's recent article, The Financial Road to Serfdom, so thought-provoking that I feel it merits a short detour.

In the course of the article, Hudson provides a brief history of bank lending, from the time of monarchies to 'parliamentary democracies'. Lending to monarchs was risky business, in that debt could be repudiated by descendants of a deceased king, for example.

"The problem facing bankers was how to make loans permanent national obligations. Solving this problem gave an advantage to parliamentary democracies". … "Bankers saw parliamentary democracy as a precondition for making sound loans to governments. This security for bankers could be achieved only from electorates having at least a nominal voice in government" … "The key financial achievement of parliamentary government was thus to establish nations as political bodies whose debts were not merely the personal obligations of rulers, but truly public and binding regardless of who occupied the throne", Hudson writes. [my emphasis]

This was an "ah, ha" moment, for me, in that it explains so many things: the gradual historical focus on 'national sovereignty' and national borders, in stark contrast with free-as-a-bird flow of capital. Citizens can't be allowed freedom of movement since their lives and possessions are, fundamentally, collateral for national debt, thanks to the usurpation of the "nominal" democratic voice.

This is, in effect, the ideological foundation that's serving today's 'full-spectrum' corporate / financial bailouts.

Which reminds me of an old joke. A prominent banker addressing a group of peers in a smoke-filled room, bellows, "Go after the poor! They may not have much money, but there's a lot of 'em!".

Golem and Golem readers, as knowledgable and resourceful as you are, how might we begin to address the true disease, as opposed to spending time and energy deconstructing its symptoms [Greece, Portugal, Spain Italy; circular, incestuous debt, etc]?

"All of this of course so that private sector banks don't have to face up to their years of Ponzi based lending practices."

Your 'handle' sir is entirely inappropriate! You have said it there in a nutshell!

But what makes it even worse is that politicians, public servants, the media & much of economics academe are equally to blame. Over the last 3 decades they have allowed the financial system, on a global scale, to become so unstable & incapable of withstanding even minor 'shocks' without instant contagion & collapse. Many just by their sheer incompetence & intellectual bankruptcy. And this latter point is a huge part of the problem – all these feckers are still in denial about what the problem really is!

The problem is really this. The sheer scale that 'capital ownership', and its demand for 'rent', has become in relation to the real economy. The collective productive ability of the majority of citizens to keep giving ever larger free lunches to these parasites is collapsing. A major part of this is the way private global banking interests have effectively completely usurped the control of sovereign central banks in controlloing the supply of new credit/currency. This is the net effect of all these incomprehensible ways that financial institutions have conjured up in creating 'leverage'. Significant amounts of it off balance sheet. Combine that with a philosophy of minimal oversight or regulation & we are where we are.

But rather than aknowledge this failure & work out a proper solution, all they are doing is dumping an even greater burden on the ordinary citizens of the real economy. Desparately kicking the can down the road every time said citizens in some country fail to magic up the (extra) rent. But the admission that a 'domino' effect would take hold if, say, Greece defaults is effectively an admission that the entire Euro, Dollar, Yen & Renminbi economic system, so intertwined as it is, is INSOLVENT.

Of course this system, pre bubble bursting, has been very effective at making the rich richer. So all these people who bought into this parallel universe are desparately trying to keep it going.

But it's beginning to look like it could all collapse anyway. The host's ability to keep feeding the parasite an ever larger percentage is just as unsustainable as consuming ever more 'natural' resources on a finite planet.

I think one possible way out of it is to get all the major currency sovereigns together to agree a debt amnesty. If they all do it synchronism, no one currency is disadvantaged or able to 'shock' the rest of the system. This is as simple as central banks typing on a keyboard. Of course implicit in this is that the global system must also shut down the casino, or at least take steps to severely limit it's size. And each currency area will need to have much more oversight & regulation, including cross oversight of each other's central banks & regulatory bodies to ensure no one's 'cheating'.

But will something like this happen? The blind & arrogant belief, in the money system they created, & the right to privelege, amongst the rich, may well prevent it. For the first time in all this, I'm beginning to see a strong possibilty, even inevitability, of complete global financial collapse.

The best they can come up with is to take the advice of a purple talking telephone and tell Greece to call Ocean Finance to consolidate their debt into one simple, affordable monthly payment.

Oh well if that brilliant plan doesn't work perhaps they could call Gavin from Autoglass next. These people are pathetic.

bill40

He referred to the financial milking of the Greece by elites, who then dump the problem onto the ordinary person.

Precisely the Modus Operandi explained by Adam Curtis in Ep1 of All watched over by machines of loving grace a few weeks back.

Thankfully, a few truth speakers slip through the net at the BBC now and then!

Not sure whether the average viewer picks this up, though.

Greece is so corrupt that it is proper to put them to "the test" to cure them all of lying! The Euro and Brit banks will have to sue the US banks as the securities fail given the mortgage mess in USA. That all takes time! Every month is precious!

Ireland continues to get more funds and so can cope without default. They have yet to even balance their budget!

But yes the rest of your comment is true! The disease is over but instead of allowing the cure the doctors are trying to keep a dead patient alive! Banking is only crucial to some sectors and their clout is They are declining! Don't analyse this as the msm explain it to you. The reality is that it is so big that all that can be done has been! Rules will be bent as that is what they are for, but the lending for investment is gone for decades. Now the lending is fictional as it is merely to paper over cracks. The Greeks themselves know what is needed, but this is how they negotiate! Decades of depression, not years of recession! There is no hurry now……